John Lewis said in its unaudited report for the full year that sales
outperformed the BRC market by 1.4 percent with market share increase in
fashion, home and electricals & home technology (EHT). Gross sales were up
2.2 percent to 4.84 billion pounds (6.7 billion dollars), with
like-for-like sales growth of 0.4 percent. Fashion sales were up 3.2
percent, boosted by a particularly strong performance in womenswear, up 5
percent, buoyed by the company-owned brand womenswear, up 14.9 percent.
However, Profit before partnership bonus, tax and exceptional items was
down 21.9 percent to 289.2 million pounds (401 million dollars), largely
due to lower gross margins in Waitrose driven by the weaker exchange rate
and commitment to competitive pricing.

Commenting on the company’s performance, Sir Charlie Mayfield, Chairman
of John Lewis Partnership, said in a media release: "As we anticipated,
2017 was a challenging year. Consumer demand was subdued and we made
significant changes to operations across the Partnership, which affected
many partners. However, their hard work throughout the year was key to
delivering gross sales of 11.60 billion pounds, up 2 percent, with
like-for-like increases in both Waitrose and John Lewis. However, profit
before Partnership Bonus, tax and exceptional items was down 21.9 percent
mainly as a result of intensifying margin pressure in Waitrose.”

John Lewis operating profit improves 4.5 percent

Operating profit before exceptional items for the period was 254.2
million pounds (352.7 million dollars) up 4.5 percent. Customer number
increased by 2.5 percent to 12.6 million. As part of its drive to improve
customer experience, the company introduced a number of initiatives
including two-hour delivery slots, online order tracking and the ability to
see more detailed product information and branch stock availability online.
In addition, Experience Desks were launched in four shops providing
customers with 'concierge style' services to help them make the most of
John Lewis.

“We said in January 2017 that we were preparing for tougher trading
conditions with weakness in sterling feeding through into cost prices,
putting pressure on margin, and much higher exceptional costs as a result
of an acceleration of planned changes. This was why we chose to reduce the
proportion of profits paid as partnership bonus last year so as to absorb
these impacts while continuing to invest in the future and in strengthening
our balance sheet. I am pleased to say that despite lower profits, strong
cash flow has enabled us to reduce our total net debts. Partnership Bonus
has been awarded at 5 percent,” added Mayfield.

The company also launched first in-house denim lifestyle brand for women
– And/Or in March 2017 and built on the success of its luxury own label,
Modern Rarity, including a collaboration with Eudon Choi. The company’s
home sales were down 0.8 percent, while EHT sales rose 2.6 percent.

In 2018, John Lewis focus on increasing the share of company-owned
labels and open stores in White City and Cheltenham.

John Lewis expects trading to remain volatile in 2018/19

For the first five weeks of the year, the company said, Partnership
gross sales were up 0.6 percent on last year, while John Lewis gross sales
were down 2.8 percent and down 3.4 percent on like-for-like basis due to
the heavy snow last week.

John Lewis expect trading to be volatile in 2018/19, with continuing
economic uncertainty and no let up in competitive intensity and anticipates
further pressure on profits.